Shares to move sideways ahead of GDP, US CPI

LOCAL EQUITIES are expected to trade sideways this week ahead the release of third-quarter Philippine gross domestic product (GDP) data and the October US consumer inflation report.

On Friday, the benchmark Philippine Stock Exchange index (PSEi) rose by 29.42 points or 0.47% to end at 6,185.53, while the broader all shares index gained 15.87 points or 0.48% to close at 3,273.70.

Week on week, the PSEi climbed by 32.10 points or 0.52% from its close of 6,153.43 on Oct. 28.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message on Friday that third-quarter earnings of listed companies lifted the market despite the release of data showing Philippine headline inflation surged in October.

Headline inflation accelerated to a near 14-year high of 7.7% in October from 6.9% in September and 4% in the same month in 2021.

For the first 10 months, inflation averaged 5.4% versus 4% a year ago, above the central bank’s 2-4% target but still lower than its 5.6% full-year forecast.

For this week, China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said the market may see muted trading and volatility as investors stay on the sidelines ahead of the release of October US consumer price index (CPI) data on Nov. 10.

“Several market-moving data will be released next week, which may dictate the market’s near-term trajectory,” Mr. Mercado said in an e-mail on Saturday.

Timson Securities, Inc. Head of Online Trading Marc Kebinson L. Lood likewise said investors will remain cautious ahead of the release of economic data.

“Market participants will be on edge next week as they await the release of October inflation data in the United States and Philippine GDP,” Mr. Lood said in a Viber message on Friday.

Third-quarter Philippine GDP data will also be released on Nov. 10.

“US CPI data will help give a picture of whether or not the Fed (US Federal Reserve) can keep true to this ‘step-down.’ The BSP (Bangko Sentral ng Pilipinas) is likely to mirror this move, given the recent inflation bump in October,” online brokerage said in a market note.

“There should be some downward bias to linger in November as the impact of typhoon Paeng in the past week has yet to be reflected in agriculture commodities,” added.

The US central bank last week delivered a fourth straight 75-basis-point (bp) hike to tame inflation, bringing the fed funds rate to a level within 3.75-4%. The Fed has raised borrowing costs by 375 bps since March.

Following the Fed’s decision, BSP Governor Felipe M. Medalla said the Monetary Board will likewise hike benchmark interest rates by 75 bps at its Nov. 17 meeting to ensure price stability. put the PSEi’s support at 6,000 and resistance at 6,200 to 6,300, while China Bank Securities’ Mr. Mercado said the index may retest the 6,200 resistance level. — Ashley Erika O. Jose